In May, Target CEO Gregg Steinhafel resigned after a massive data breach in which hackers stole personal data and credit card information from millions of customers. The $40 billion (market cap)* big box retailer is being temporarily headed by CFO John Mulligan until the company finds a replacement.
But as the Wall Street Journal reports in an excellent deep dive, Target had lost its way under Steinhafel long before the data-breach disaster, for which the CEO felt personally accountable. After the recession, the cheap-chic retailer–wildly successful in the ’90s–lost its creative edge and many of its customers along with it. Customer traffic has fallen for six straight quarters.
Unlike his predecessor, Robert Ulrich, who led the company from 1988 to 2008, Steinhafel was rigidly focused on performance metrics instead of on innovative design and risk-taking. A retailer that once had a reputation for quirky, innovative advertising, and high-end designer collaborations (the mantra was “fast, fun, and friendly”) started to feel more like Walmart as it offered fewer new and unusual products and more food staples and run-of-the-mill household items. Bureaucracy plagued a fumbling, indecisive management team: earlier this year, a plan to use mannequins for the first time in some stores was stalled by months of testing and review.
After Steinhafel’s departure, top executives hope to return to a more creative approach to product design and marketing. They’ve pledged to add more products and speed up decision-making.
*An earlier version of this article didn’t specify that $40 billion referred to Target’s market capitalization and not its annual revenue. The annual revenue in 2013 was more than $70 billion.